3.1. Preparation of financial statements
A subsection of Accounting, 9706, through 3. Financial accounting (A Level)
Listing 10 of 678 questions
X and Y are in partnership. Z was admitted to the partnership on 1 July 2018. It was also agreed that at that date: Assets of the partnership would be valued upwards by $48 000. Value of goodwill would be $20 000, but no goodwill account would be retained in the books of account. Z would introduce $80 000 cash. Profit and loss sharing ratio would be X, Y and Z, 2 : 1 : 1 respectively. What was Z’s capital account balance immediately after the admission?
9706_w19_qp_11
MCQ
2019
Paper 1, Variant 1
View
P and Q are in partnership. R was admitted as a partner on 1 July 2018, and the profit and loss sharing ratio among P, Q and R was 2 : 2 : 1 respectively. For the purpose of R’s admission, the partners agreed: goodwill would be valued at $20 000, but not retained in the books of account R would introduce cash, $40 000, and motor vehicle, $10 000 R would be entitled to an annual salary, $5000. What was R’s capital account balance immediately after his admission?
9706_w19_qp_12
MCQ
2019
Paper 1, Variant 2
View
Adam, Bilal and Chan operate a partnership providing secretarial services. The partners have no formal partnership agreement. The following balances are extracted from the trial balance at 31 December 2018. Debit Credit $ $ Fees revenue received 152 000 Business operating costs 76 000 Capital accounts Adam 30 000 Bilal 20 000 Chan 10 000 Current accounts Adam 36 000 Bilal 4 000 Chan 12 000 Trade receivables 27 000 Loan account: Bilal 80 000 Motor vehicles at net book value 96 000 REQUIRED Calculate the profit for the year ended 31 December 2018 before appropriation. Calculate the share of profit appropriated to Bilal for the year ended 31 December 2018. Additional information On 1 January 2019, Bilal decided to retire from the partnership. The partners agreed the following. Bilal was to retain one motor vehicle. The net book value of the motor vehicle was $36 000 but it was agreed to transfer it to Bilal at a value of $30 000. The remaining motor vehicles were to be revalued upwards by 5%. An irrecoverable debt of $2000 was to be written off and a provision for doubtful debts of 4% was to be made. Goodwill was to be valued at $24 000. Bilal agreed to leave $45 000 in the partnership as a loan at 8% per annum interest. The remaining balance due to Bilal was to be paid from the partnership bank account. REQUIRED Prepare the revaluation account at 1 January 2019. Prepare a statement showing the amount to be paid to Bilal from the partnership bank account on his retirement. Additional information Adam and Chan are to continue in partnership after Bilal’s retirement and plan to draw up a formal partnership agreement to include the following: profit-sharing ratio rate of interest on capital rate of interest on drawings. REQUIRED State two reasons why partners may agree to provide interest on capital. State two reasons why partners may agree to charge interest on drawings. State two further terms that may appear in a partnership agreement.
9706_w19_qp_21
THEORY
2019
Paper 2, Variant 1
View
L, M and N were in partnership sharing profits and losses in the ratio 3 : 2 : 1. The partnership was dissolved on 31 December 2019. After all assets had been realised and all liabilities paid, the following balances remained in the books of account. L ($) M ($) N ($) total ($) partners’ capital accounts 30 000 20 000 10 000 60 000 partners’ current accounts 4 000 8 000 (3 000) 9 000 cash at bank 60 000 realisation account 9 000 How much cash did N receive when the dissolution was complete?
9706_w20_qp_11
MCQ
2020
Paper 1, Variant 1
View
Adil and Bashir were in partnership sharing profits and losses in the ratio 2 : 1. Chandra joins the partnership and profits and losses are now to be shared between Adil, Bashir and Chandra in the ratio 3 : 2 : 1. The balances of the partners’ capital accounts prior to Chandra joining the partnership are as follows: $ Adil 20 000 Bashir 10 000 Goodwill is to be valued at $36 000 and is not to be retained in the books of account. What is the balance on Adil’s capital account after Chandra joined the partnership?
9706_w20_qp_12
MCQ
2020
Paper 1, Variant 2
View
At 31 December 2019 X, Y and Z were in partnership sharing profits and losses equally. At that date the net assets of the partnership were valued at $300 000 and X’s capital account balance was $70 000. On 1 January 2020 X retired. The net assets were then revalued upwards by $90 000. X left half of the amount due to him on retirement as a loan to the partnership. What was the value of the partnership’s net assets remaining after X’s retirement?
9706_w20_qp_13
MCQ
2020
Paper 1, Variant 3
View
Questions Discovered
678